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Shoppers buy last of Hostess snacks

By Alana Melanson, amelanson@sentinelandenterprise.com

Updated:
11/17/2012 06:34:45 AM EST

FITCHBURG -- By 5 p.m., the shelves of the J.J. Nissen Bakery Thrift Store on Crawford Street were largely empty, as word spread throughout the day that parent company Hostess Brands would be going out of business.

Like many longtime customers, Phillipston resident Barbara Watkins made the trip to the store for Twinkies and Wonder Bread, favorites of hers since childhood. Growing up in Fitchburg, she remembers when Hostess had a store off of Main Street and a bakery on River Street, both of which have been gone for several years.

"It really stinks," she said of the company going out of business. "I've been coming here for years, and my mother came here before that."

Her daughter, Diana Watkins, agreed.

"It's been a once-a-week thing for so long," she said.

Fitchburg resident Patrick Richard said he's only been coming to the store for the last couple years, but wanted to get the last couple of lemon pies he may ever have from the company.

Melissa Graham and Amber Meeker, both of Gardner, didn't know the store would be closing until they arrived there around 4:45 p.m. and saw the empty shelves. They were very disappointed to hear the news, as they have been frequent customers for many years.

Meeker said she was always able to stock up on snacks for her children at the store, which offered items for about half of what she would pay at a supermarket.

"There's not much left," she said.

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Meeker grabbed some cheese danishes and other cream-filled goodies, while Graham went for the fig bars.

"I feel bad for the employees," Meeker said. "It was short notice and now they have to look for jobs."

Three employees at the store Friday evening said they were not allowed to talk to the press, but told customers the store would be open today. After that, they weren't sure.

It is unclear how many local employees will be affected by the closing.

The announcement that Hostess -- which includes popular brands such as Drake's, Nature's Pride and Colombo -- would be closing down its plants came early on Friday after a months-long union bakers strike and years of financial issues.

Hostess, whose roster of brands dates as far back as 1888, hadn't invested heavily in marketing or innovation in recent years as it struggled with debt and management changes.

As larger competitors inundated supermarket shelves with a dizzying array of new snacks and variations on popular brands, Hostess cakes seemed caught in time. The company took small stabs at keeping up with Americans' movement toward healthier foods, such as the introduction of its 100-calorie packs of cupcakes. But the efforts did little to change its image as a purveyor of empty calories with a seemingly unlimited shelf life.

Even taking into account changing tastes and competition, Hostess' problems were ultimately rooted in its own financials.

The company, based in Irving, Texas, had been saddled with high pension, wage and medical costs related to its unionized workforce. It was making its second trip through bankruptcy court in less than three years.

Before the Chapter 11 filing in January, citing growing competition from rivals that expanded their reach over the years, the company had been contributing $100 million a year in pension costs. The new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.

Tensions between management and workers were also an ongoing problem. Hostess came under fire this year after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent even as the company was struggling last year.

Although some of those executives later agreed to reduced salaries, others -- including the former CEO Brain Driscoll -- had left the company by the time the pay hikes came to light.

Hostess filed a motion to liquidate Friday with U.S. Bankruptcy Court after it said striking workers across the country crippled its ability to maintain production.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Officer Gregory F. Rayburn said in a press release. "Hostess Brands will move promptly to lay off most of its 18,500 workforce and focus on selling its assets to the highest bidders."

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